DUBAI, May 31 (Reuters) – Arada Developments, the largest developer in Sharjah in the United Arab Emirates, was set to raise $350 million in its first foray into the debt markets, a document released on Tuesday showed.

The yield was pegged at 8.125%, tightening from the initial price direction of around 8.25%. Islamic bonds, or sukuk, received more than $720 million in orders, including $185 million in interest from co-leads, according to one of the banks’ document on the deal.

The company had said the sukuk would be a benchmark size, which usually means at least $500 million.

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The issue is the first public sale of dollar bonds outside the Gulf since late March, when the Sharjah government raised $750 million, also with sukuk.

The region has seen a dearth of bond sales this year amid continued market volatility and many issuers turning to lending.

Arada is 40% owned by Basma Group, which is owned by Sharjah’s deputy ruler, and 60% by Corp KBW Investments, which is owned by Prince Khaled bin Alwaleed bin Talal Al Saud, a member of the Saudi royal family.

The company touted “proven support from government and regulators” in an investor presentation seen by Reuters. This included a guarantee for a loan of up to $436 million, flexible payment plans and an allotment of premium land, according to the presentation.

Dubai Islamic Bank (DISB.DU), Emirates NBD Capital (ENBD.DU) and Standard Chartered Bank (STAN.L) are the global co-coordinators. They are joined by Abu Dhabi Commercial Bank (ADCB.AD), Ajman Bank (AJBNK.DU), Al Rajhi Capital (1120.SE), Kamco Invest (KAMC.KW), Mashreq (MASB.DU), Sharjah Islamic Bank ( SIB.AD) and Warba Bank (WARB.KW) as co-managers and bookrunners, the document from one of the banks says.

Last week, the capital of the United Arab Emirates, Abu Dhabi, raised $300 million by mining two existing bonds, maturing in 2026 and 2027, both with coupons of 3.125%. HSBC was the sole lead manager and bookrunner.

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Reporting by Yousef Saba; Editing by Shailesh Kuber and David Holmes

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